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  • Monday's Scoop: Rolling๐ŸŒค๏ธ

Monday's Scoop: Rolling๐ŸŒค๏ธ

Boeing workers ramp up strike & California sues Exxon

Hey friends - weโ€™re back! I hope you didnโ€™t miss your scoops too much.
Hereโ€™s what you need to know today to inform your work, spending, and investments:

 

๐ŸŒŽ Big picture

  1. Business activity is still pretty strong.

  2. The government doesnโ€™t have a budget but should avoid a shutdown.

  3. Stamp prices will finally stop climbing.

How are you feeling about the economy?

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 ๐Ÿ’ผ Work trends

Unemployment Rate: 4.2%
Relatively normal, low

Business activity is still pretty steady. S&P Global reported that its composite Purchasing Managers Index (PMI) indicated a continued expansion in activity across both manufacturing and services sectors last month. The manufacturing sector has been in a slump for a while, and activity hit a 15-month low last month, but it only accounts for about a tenth of the economy. However, the cost of goods and services saw the fastest increase in six months, primarily driven by wage hikes in the services industry. Despite these rising costs, the US economy is still growing at a solid pace overall.

The government hasnโ€™t figured out its annual budget yet, but it should be able to avoid a shutdown. The US House of Representatives is working to prevent a partial government shutdown with a new three-month stopgap funding bill. House Speaker Mike Johnson introduced the proposal just days before the current $1.2 trillion in discretionary funding expires on September 30. The bill, which excludes a controversial immigration measure demanded by Donald Trump, aims to extend government funding through December 20. This effort follows the rejection of a previous six-month proposal that included stricter voter registration requirements. Lawmakers are now racing to secure a bipartisan agreement and avoid a shutdown that could furlough federal workers and disrupt services.

 

 ๐Ÿค“ Inside Scoop: What causes a government shutdown?

A US government shutdown occurs when Congress can't agree on a budget for the upcoming fiscal year. It's a political standoff, often due to disagreements on where money should be spent, causing disruptions until a compromise is reached. If a new annual budget is not passed by the October 1st deadline, many federal agencies and services may stop operating due to lack of funding. Essential services, like the military and air traffic control, keep running, but others, like national parks, might close. Government support services likely stay operating but may experience delays or disruptions. The most prolonged shutdown was for 34 days in 2018.

When the US government shuts down, federal employees are placed on unpaid leave (furloughed), but they receive back pay for the time they were furloughed once the government reopens. Federal contractors, though, do not automatically receive pay. Their pay depends on the terms of their contracts, and they may not recoup lost wages even after the government reopens.

 ๐Ÿ‘œ Cost of living trends

Inflation Rate: +2.5% (YoY), +0.2% (MoM)
Policymakers aim for 2% YoY inflation (August CPI)

Stamp prices will finally stop climbing. For the first time since 2022, the US Postal Service (USPS) will not raise stamp prices in January. This decision follows a series of price hikes, including the most recent increase in July when the cost of a first-class stamp rose to 73 cents. Postmaster General Louis DeJoy cited declining inflation projections as a reason for the pause, with no price increases expected before July 2025. Despite efforts to restructure and cut costs, USPS continues to grapple with financial challenges, reporting a $6.5 billion net loss last year as first-class mail volume hit its lowest since 1968. The USPS has raised stamp prices by 36% since early 2019 to try to cover its costs.

 

 ๐Ÿ“ˆ Investment trends

The Market: โฌ†๏ธ +0.3%
S&P 500: 5,718.57
1Mo: +2% | 1Yr: +32% | 5Yr: +93%

The market climbed to a new record high on Monday as investors continued the positive momentum from the Federal Reserve's policy update last week. The Fed lowered baseline interest rates for the first time in years, signaling an end to a period of policy aimed at restricting the economy.

 

๐Ÿญ Companies worth watching

๐Ÿ‘๐Ÿ‘Ž APPROVAL RATINGS 

Act like a boardmember and judge how companies behave. Engaging helps build your financial confidence and hold corporations accountable. (+2pts)

Boeing

Worker Standoff

With more than 30,000 factory workers on strike demanding better pay and pensions, Boeing has begun furloughing non-union workers to save cash.

The planemaker already faces major financial struggles due to its production failures and malfunctions, and the strike is estimated to cost $50M per day.

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Johnson & Johnson

Powder Play

Johnson & Johnson filed for bankruptcy with one of its subsidiaries to limit its total liability to $8B for claims that its baby powder talc products caused cancer.

The healthcare giant's third bankruptcy attempt aims to end years of costly litigation, but the process still faces challenges.

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Exxon Mobil

Pollution Accountability

Exxon Mobil faces a landmark lawsuit from California accusing the world's largest single-use plastic resin producer of misleading the public about the limitations of recycling and fueling global plastic pollution.

The fossil fuels giant faces mounting legal challenges from governments and environmental groups demanding accountability for climate crises.

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 ๐Ÿ’ญ Broader perspectivesโ€ฆ (+2pts)

Should plastic producers have to pay for environmental damage from plastic pollution?

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Keurig Dr Pepper

Recycling Ruse

Keurig Dr Pepper agreed to a $1.5M fine after authorities found the beverage giant misled investors and consumers in saying that its K-Cup pods were recyclable.

The coffee pod maker did not disclose that leading recycling companies would not accept the pods and raised doubts about their recyclability.

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Nike

Retail Reset

Nikeโ€™s new CEO, Elliott Hill, is expected to focus on mending relationships with retailers to revive sales after the outgoing CEOโ€™s push for direct-to-consumer sales failed to deliver.

The sportswear giant will launch cheaper sneakers to lure cost-worried consumers and regain market share.

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